TaxTMI 
TaxTMI 
2025 (12) TMI 1141
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....lected and search action, the Show Cause Notice No.03/2013 dated 08.01.2013 was issued to the Athur unit proposing demand of duty on MRP basis under Section 4A of Central Excise Act, 1944 for the period from 01.04.2007 to 15.09.2010 involving differential duty of Rs.21.79 lakhs, interest and equal penalties under Section 11AC and Rules 25 & 26 of CER, 2002, seizure and proposed confiscation/redemption fine were also made. 2.2 Original Adjudicating Authority (Joint Commissioner) confirmed the demand and penalties vide his Order-in-Original No.03/2016 dated 29.11.2016; Commissioner (Appeals) rejected the appeal vide Order-in-Appeal No.95/2017 dated 21.04.2017 who ordered to: - i. set aside the demand of duty of Rs.21,79,988/- with interest made on the Appellant on packaged drinking water adopting assessable value under Sec.4A of the CEA, 1944; ii. demanded duty with interest on the impugned goods computed based on assessable value as per Sec.4 ibid under proviso to Section 11A(1) of the CEA, 1944; iii. set aside the penalty of Rs.21,79,988/- imposed on the Appellant under Section 11AC ibid; iv. ordered that penalty equal to duty determined under....
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....cope of the MRP notifications; there is no evidence of suppression, fraud, or deliberate concealment. As the Supreme Court and Tribunals have held repeatedly, that extended period and invoking proviso to Section 11A(1) is not permissible where the matter is one of bona fide interpretation as held in Nizam Sugar Factory vs. Collector of Central Excise, AP [2008 (9) STR 314 (SC)] and other precedents cited. The SCN in question was the fourth administrative communication on the issue further negating any allegation of concealment. That penalties are punitive and require mens rea or negligence. The case law in Uniflex Cables Ltd. establishes that interpretation disputes do not give rise to penalty. Liability of the director Shri K. Sinosh is also not established as there is no evidence of his direct malfeasance and prior orders in related units have exonerated him. 5.6 That the Appellant has obtained favourable Tribunal decisions for related/identical periods for other units (Coimbatore, Konnakuzhy), where demands and penalties were set aside; these decisions are directly relevant and call for consistency. 5.7 Finally the Appellant prayed to allow the appeal and to set aside t....
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.... potable water as mineral water when there is no evidence of addition/reduction of minerals. The test is factual and depends on whether the manufacturing process results in addition of mineral salts or their alteration to the extent that the product becomes mineral water in commercial parlance. 9.3 We have perused the Record in the present case. A certificate from an independent/ex-Government Scientist and the Appellant's process details (filtration, chlorination, ozonization, UV) which show no addition/removal of minerals. The Appeal records do not identify any laboratory analysis demonstrating addition of mineral salts or demineralization to convert the product into mineral water for the Athur unit. In the absence of positive evidence, the classification as "mineral water" is not tenable. 9.4 In view of the above, we hold that the Athur unit's product is packaged potable drinking water and is not covered by the MRP notifications. The Order-in-Appeal's reliance on MRP notifications to reach valuation under Section 4A is therefore erroneous. 10. As we find that the product is not statutorily covered by the notifications relied upon, the impugned demand which proceeds on MR....
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.... unsustainable classification and the Appellant advanced a bona fide position, imposition of penalty is not justified. Higher judicial forum and Tribunal's decisions cited above hold that penal consequences should not follow on the grounds of mere disagreement on statutory interpretation. Accordingly, penalty on the company under Section 11AC must be set aside, which we do so. 14.2 As regards personal penalty on Shri K. Sinosh under Rule 26 CER: the Order-in-Appeal records no evidence to establish active dishonest conduct or deliberate concealment by Shri Sinosh. His role as Executive Director does not ipso facto make him liable where the charge is one of interpretation and there is no proof of mens rea. In the absence of any evidence, the penalty on Shri Sinosh is also not sustainable and is set aside. 15. Confiscation/seizure and redemption fine (Rs.15,000) were imposed; given that the primary liability itself under 4A is unsustainable and no evidence shows the goods were prohibited or illegally cleared, the confiscation and redemption fine must be set aside, which we do so. 16. Further, we note that the questions before us is no longer res integra. In two earlier final ....
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.... confusion in the notification as it mentions the sub-heading 22019090 which applies to drinking water. Section 4A is the provision for payment of duty on goods cleared on MRP basis. In order to assess the value of goods under Section 4A, the abatement granted in these notifications also have to be considered. The department is of the view that subheading 22019090 applicable to packaged drinking water when mentioned in column (2) of the notification, it is implied that packaged drinking water is to be included in the category of mineral water. We are not able to endorse this view. Taxation statutes cannot be interpreted on any presumptions or assumptions. In other words, there is no implied power of taxation. It has often been held by courts that subject goods is not to be taxed, unless the words of the statute unambiguously impose a tax. An ambiguity in a taxation provision is to be interpreted in favour of assesee. [Commissioner of Customs (Import), Mumbai Vs Dilip Kumar & Company - 2018 (361) ELT 577 (SC)]. Our view is further fortified by the fact that in subject notification No.3/2015-CE (NT) dt. 1.3.2015, in column No. (2) the tariff heading is mentioned as 2202 and descripti....